Question: A director of a corporation cannot lend

> In 1997, Isbell purchased a building in San Diego with the intent to open an adult entertainment establishment there. Because this building was located within 1,000 feet of a residential area, how- ever, a San Diego zoning ordinance precluded him from op

> Kenneth and Mary Norpel purchased a house, and Kenneth attached a 35-foot flagpole to it. He did not obtain the permission of the architectural committee of the Stone Hill Community Association. This consent was required by a restrictive covenant to whic

> Patrick Bossenberry owned a house in a planned community area. Each lot in the area was limited by a restrictive covenant to use for a single-family dwelling. The covenant defined family as a blood or marital relationship between most of the occupants. B

> Some sections of the city of Manitou Springs have hills of varying degrees of slope. To protect against water drainage and erosion, the city adopted a hillside zoning ordinance that required homes on hillsides to be surrounded by more open land than in t

> Henry Hatfield, CPA, was hired to prepare audited financial statements for Happy Campers, a nonprofit organization providing summer camp scholarships for inner-city, low-income children. The executive director of Happy Campers was embezzling but falsifie

> The Stallcups lived in a rural section of the state. In front of their house ran a relatively unused, unimproved public county road. Wales Trucking Co. transported concrete pipe from the plant where it was made to a lake where the pipe was used to con- s

> Taback began building a vacation home on a parcel of wooded land. It was to be a three-story house, 31 feet high. This height violated the local zoning ordinance that limited residential homes to two and one-half stories, not exceeding 35 feet. When Taba

> Lester purchased a used automobile from Mac- Kintosh Motors. He asked the seller if the car had ever been in a wreck. The MacKintosh sales- person had never seen the car before that morning and knew nothing of its history but quickly answered Lester’s qu

> William Potts was employed by Jemoli Holdings, Inc., to liquidate assets of defunct companies. Potts had the authority to sign checks for Jemoli. Potts had a personal investment account with Raymond James Financial Services. When the stock market had its

> The city of Salinas entered into a contract with Souza & McCue Construction Co. to construct a sewer. City officials knew unusual subsoil conditions (including extensive quicksand) existed that would make performance of the contract unusually difficult.

> The McConnells bought a home in Sherwood Estates. The land was subject to a restrictive covenant that “ no building, fence, or other structure ” could be built on the land without the approval of the developer of the property. The McConnells built a dog

> Federal Oil Co. was loading a tanker with fuel oil when the loading hose snapped for some unknown reason and about 1,000 gallons of oil poured into the ocean. Federal Oil was prosecuted for this water pollution. It raised the defense that it had exercise

> Union Electric wishes to construct a new coal-fired plant in the northeastern corner of Arizona. Union plans to use the maximum achievement technology for the scrubbers on the plant to reduce emissions. Will Union be able to obtain a permit from the EPA

> Gregory Mills lives next to Dean Kimbley. Mills kept a journal of Kimbley ’ s activities, and even videotaped a few of the activities, including Kimbley ’ s smoking marijuana and standing drunk in his backyard and yelling, “ Hi, neighbor! ” Kimbley also

> The EPA has increased its BACT standards to impose greenhouse gas emissions standards for passenger cars, light-duty trucks, and medium-duty passenger vehicles and all businesses that emit greenhouse gases. The emissions from these small businesses and v

> A zoning ordinance of the city of Dallas, Texas, prohibited the use of property in a residential district for gasoline filling stations. Lombardo brought an action against the city to test the validity of the ordinance. He contended that the ordinance vi

> Nelson wanted to sell his home. Baker sent him a written offer to purchase the home. Nelson made some changes to Baker’s offer and wrote him that he, Nelson, was accepting the offer as amended. Baker notified Nelson that he was dropping out of the transa

> General Automotive operates Grand Auto Parts Stores, which receive used automotive batteries from customers as trade-ins. General ’ s policy in disposing of these batteries had been to drive a screwdriver through each spent battery and then sell them to

> Philip Carey Co. owned a tract of land in Plymouth Township, Pennsylvania, on which it deposited a large pile of manufacturing waste containing asbestos. Carey sold the land to Celotex, and Celotex sold the land to Smith Land & Improvement Corp. The EPA

> The Friersons have a two-story building in Easley, South Carolina, that shares a common wall with an adjacent two-story building owned by David and Patricia Watson. An outdoor stairway located on the Watsons ’ property provides access to the second floor

> Office Supply Outlet, Inc., a single-store office equipment and supply retailer, ordered 100 model RVX-414 computers from Compuserve, Inc. A new staff member made a clerical error on the order form and ordered a quantity that was far in excess of what Of

> Robert E. Long owned land in the City of Hampton that he leased to Adams Outdoor Advertising Limited Partnership. Adams had an advertising billboard placed on the property. On October 6, 1993, Long notified Adams that he was terminating the lease. Adams

> Sanders gave Clary a check but left the amount incomplete. The check was given as advance payment on the purchase of 100 LT speakers. The amount was left blank because Clary had the right to substitute other LT speakers if they became available and the s

> Vern Westby inherited a “ticket” from Anna Sjoblom, a survivor of the sinking of the Titanic, which had been pinned to the inside of her coat. He also inherited an album of postcards, some of which related to the Titanic. The ticket was a one-of-a-kind i

> Bradt believed that his backyard ran all the way to a fence. Actually, a strip on Bradt ’ s side of the fence belonged to his neighbor, Giovannone, but Bradt never intended to take land away from anyone. Bradt later brought an action against Giovannone t

> Henry Lile owned a house. When the land on which it was situated was condemned for a highway, he moved the house to the land of his daughter, Sarah Crick. In the course of construction work, blasting damaged the house. Sarah Crick sued the contractors, T

> Miller executed a deed to real estate, naming Zieg as grantee. He placed the deed in an envelope on which was written “ To be filed at my death ” and put the envelope and deed in a safe deposit box in the National Bank that had been rented in the names o

> At approximately 3:00 A . M ., on February 3, 2000, Sonya Winchell was driving two of her friends through a Fort Wayne Taco Bell drive-thru. When Winchell arrived in line, there was one car in front of her at the speaker. Winchell noticed that the occupa

> Melvin J. Ford, president of International Loan Network, Inc. (ILN), promoted ILN ’ s financial enrichment programs to ILN members and prospective members with evangelical fervor at revival- style “ President ’ s Night ” gatherings. His basic philosophy

> Kenneth Corson, 10, lived with his mother, Lynda Lontz, in an apartment building owned by Bruno and Carolyn Kosinski. While playing with other children who lived in the same building, Corson was drawn to a stairwell that provided access to the building ’

> After executing the various deeds, J. M. Fernandez Jr. placed them in a closet (with other valuable papers) for safekeeping until they could be physically delivered to the various grantees, including Sylvia Sheppard, when she returned to Key West. This c

> David S. Talesnick served as the accountant for Kenneth Ronson and his wife as well as for Ronson ’ s company, performing accounting and tax services for all. From 1980 to 1983, Ronson, his wife, and his company invested in the White Rim Oil & Gas, Pine

> Harald Dude ’ s real estate dealings began breaking bad in 2003. After securing a $1.9 million loan from Washington Mutual on a house he owned in Aspen, Mr. Dude quickly sought to borrow another $500,000 from Wells Fargo. The Washington Mutual mortgage w

> Bunn and his wife claimed that they had an easement to enter and use the swimming pool on neighboring land. A contract between the former owners of the Bunns ’ property and the adjacent apartment complex contained a provision that the use of the apartmen

> n 1972, Donald and Joyce Carnahan purchased a 1-acre lot located on a 22-acre lake. The purchase included a portion of the lake bed. The Carnahans used the lake for recreational activity in both winter and summer, and their activities included motor- boa

> Jones, wishing to retire from a business enterprise that he had been conducting for a number of years, sold all of the assets of the business to Jackson Corp. Included in the assets were a number of promissory notes payable to the order of Jones that he

> Martin Manufacturing decided to raise additional long-term capital by mortgaging an industrial park it owned. First National Loan Co. agreed to lend Martin $1 million and to take a note and first mortgage on the land and building. The mortgage was duly r

> The Printers International Union reached agreement for a new three-year contract with a large regional printing company. As was their practice, the union negotiators then met with Sullivan Brothers Printers, Inc., a small specialty shop employing 10 unio

> O conveys property to A on December 1, 2015. O conveys the same property to B who does not know about A and who records his deed on December 2, 2015. O then conveys the same property to C . Who has title to the property?

> Christine and Steve Mallock buried their son in a burial plot purchased at Southern Memorial Park, Inc. Each year the Mallocks conducted a memorial service for their son at his burial plot. On the seventh anniversary of their son ’ s death, the Mallocks

> Texas International Speedway, Inc. (TIS), filed a registration statement and prospectus with the Securities and Exchange Commission offering a total of $4,398,900 in securities to the public. The proceeds of the sale were to be used to finance the constr

> What is the relationship between trespass and adverse possession?

> CEO Bernard Ellis sent a memo to shareholders of his Internet-related services business some four days before the expiration of a lock-up period during which these shareholders had agreed not to sell their stock. In the memo, he urged shareholders not to

> Determine whether the following would be fixtures or personal property. a. Refrigerator in a home b. Refrigerators in an apartment complex with furnished units c. Refrigerators in a restaurant kitchen d. Refrigeration/freezer units in a grocery store e.

> Rudolph Redmont, the president of Abbott Thinlite Corp., left Abbott to run Circle Corp. in competition with his former employer. It was claimed that he diverted contracts from his former employer to his new one, having gained the advantage of specific i

> Klinicki and Lundgren incorporated Berlinair, Inc., a closely held Oregon corporation. Lundgren was president and responsible for developing business. Klinicki served as vice president and director responsible for operations and maintenance. Klinicki own

> Anthony Yee was the president of Waipahu Auto Exchange, a corporation. As part of his corporate duties, he arranged financing for the company. Federal Services Finance Corp. drew 12 checks payable to the order of Waipahu Auto Exchange. These were then in

> Hamway and other minority shareholders brought an action against majority shareholders of Libbie Rehabilitation Center, Inc., including Frank Giannotti, CEO-director; Alex Grossman, president- director; Henry Miller, vice president-director; Ernest Dervi

> Getty Petroleum distributes gasoline through dealer- owned stations. Customers who buy gas at a Getty station can pay by cash or credit card. When a customer uses a credit card, Getty processes the trans- actions, receives payment from the credit card co

> Danny Hill, the general manager of Southeastern Floor Covering Co., Inc. (SE), had full authority to run the business. His responsibilities included pre- paring and submitting bid proposals to general contractors for floor coverings and ceilings on const

> High-Tech Collieries borrowed money from Holland. High-Tech later refused to be bound by the loan contract, claiming the contract was not binding because it had been obtained by duress. The evidence showed that the offer to make the loan was made on a ta

> Douglas Hansen, Leo Borrell, and Bobby Lawrence were three psychiatrists who recognized the need for an inpatient treatment facility for adolescents and children in their community. They became limited partners in building a for-profit psychiatric facili

> Sippy was thinking of buying Christich ’ s house. He noticed watermarks on the ceiling, but the agent showing the house stated that the roof had been repaired and was in good condition. Sippy was not told that the roof still leaked and that the repairs h

> On October 22, 2001, Benjamin Ritchie executed a promissory note and mortgage in consideration for a $47,000 loan from WaMu. The mortgage covered both real estate located at 1790 Mount Mariah Road, Carlisle, Kentucky, and a manufactured home to be situat

> Kimbrell ’ s Furniture Co. sold a new television set and tape player to Charlie O ’ Neil and his wife. Each purchase was on credit, and in each instance, a security agreement was executed. Later on the same day of purchase, O ’ Neil carried the items to

> Kim purchased on credit a $1,000 freezer from Silas Household Appliance Store. After she had paid approximately $700, Kim missed the next monthly installment payment. Silas repossessed the freezer and billed Kim for the balance of the purchase price, $30

> Rawlings purchased a typewriter from Kroll Type- writer Co. for $600. At the time of the purchase, he made an initial payment of $75 and agreed to pay the balance in monthly installments. A security agreement that complied with the UCC was pre- pared, bu

> When Johnson Hardware Shop borrowed $20,000 from First Bank, it used its inventory as collateral for the loan. First Bank perfected its security interest by filing a financing statement. The inventory was subsequently damaged by fire. Flanders Insurance

> Edward Johnson III, the CEO and principal owner of the world’s largest mutual fund company, Fidelity Investments, Inc., was a longtime tennis buddy of Richard Larson. In 1995, Johnson asked Larson, who had construction experience, to supervise the constr

> A consumer made a purchase on a credit card. The card issuer refused to accept the charge, and an attorney then sued the consumer for the amount due. In the complaint filed in the lawsuit, the attorney wrongly stated that interest was owed at 18 percent

> Richard Grassgreen was executive vice president and then president and chief operating officer of Kinder- Care, Inc., the largest proprietary provider of child care in the country. The company was restructured in 1989 and changed its name to the Enstar G

> The town of Newport obtained a corporate MasterCard that was given to the town clerk for purchasing fuel for the town hall. The town clerk used the card for personal restaurant, hotel, and gift shop debts. The town refused to pay the card charges on the

> In December 2008, Corey and Jamie Baker purchased a TV from Best Buy as well as a four-year service contract for the TV. In November 2010, Best Buy determined that the problems the Bakers were having with the TV could not be fixed, so Best Buy replaced t

> Blubaugh was a district manager of Schlumberger Well Services. Turner was an executive employee of Schlumberger. Blubaugh was told that he would be fired unless he chose to resign. He was also told that if he would resign and release the company and its

> International Yogurt Co. (IYC) developed a unique mix for making frozen yogurt and related products. Morris and his wife purchased a franchise from the company but were not told that a franchise was not a requirement for obtaining the mix — that the comp

> On October 14, 1980, United American Bank of Knoxville made a $1,700,000 loan to Frederic B. Ingram. William F. Earthman, the president of the bank and a beneficiary of the loan, had arranged for the loan and prepared the loan documents. Mr. Ingram and M

> On May 16, 2003, Sari Smith filed a class-action lawsuit in Cook County, Illinois, against J.M. Smucker Co. on behalf of “ [a]ll purchasers in the United States of America of spreadable fruit products labeled ‘ Simply 100% Fruit ’ manufactured, produced,

> Thomas was sent a credit card through the mail by a company that had taken his name and address from the telephone book. Because he never requested the card, Thomas left the card lying on his desk. A thief stole the card and used it to purchase merchandi

> Sharolyn Charles wrote a check for $17.93 to a Poncho ’ s Restaurant on July 4, 1996, as payment for a meal she had there. The check was returned for insufficient funds. Poncho ’ s forwarded the check to Check Rite for collection. On July 19, Check Rite

> Colgate-Palmolive Co. ran a television commercial to show that its shaving cream, Rapid Shave, could soften even the toughness of sandpaper. The commercial showed what was described as the sandpaper test. Actually, what was used was a sheet of Plexiglas

> The San Antonio Retail Merchants Association (SARMA) was a credit reporting agency. It was asked by one of its members to furnish information on William Douglas Thompson III. It supplied information from a file that contained data on William III and on W

> Classify each of the following activities as proper or prohibited under the various consumer statutes you have studied. a. Calling a hospital room to talk to a debtor who is a patient there. b. Calling a hospital room to sell surgical stockings. c. Rol

> Discuss the power of a corporation ’ s president to employ a sales manager and to agree that the man- ager should be paid a stated amount per year plus a percentage of any increase in the dollar volume of sales that might take place.

> A made a contract to construct a house for B. Subsequently, B sued A for breach of contract. A raised the defense that the contract was not binding because it was not sealed. Is this a valid defense? [ Cooper v. G. E. Construction Co., 158 S.E.2d 305 (Ga

> Willingham proposed to obtain an investment property for the Tschiras at a “fair market price,” lease it back from them, and pay the Tschiras a guaranteed return through a management contract. Using a shell corporation, The Wellingham Group bought a comm

> Parente, Randolph, Orlando & Associates (Parente) is an accounting firm that had done auditing work for Sparkomatic for nearly 20 years. On June 14, 1993, Sparkomatic entered into a Memorandum of Intent with Williams Controls to sell Williams assets from

> List three areas in consumer credit cards affected by the CARD Act.

> Alpha University has an arrangement with Axis Credit Card Company to collect 1 percent on all credit card charges made by students who obtain their cards through booths on the Alpha campus. Do any consumer protection statutes apply to this relationship?

> Stevens purchased a pair of softball shoes manufactured by Hyde Athletic Industries. Because of a defect in the shoes, she fell and broke an ankle. She sued Hyde under the state consumer protection act, which provided that “ any person who is injured in

> Charter Bank of Gainesville had in its possession a note containing the following provision: “ This note with interest is secured by a mortgage on real estate, of even date herewith, made by the maker hereof in favor of said payee ... . The terms of said

> Jack Smith was required by his bank to obtain two sureties for his line of credit of $100,000. Ellen Weiss has agreed to act as a surety for $50,000, and Allen Fox has agreed to act as a surety for $75,000. Smith has used the full $100,000 in the line of

> Hugill agreed to deliver shingles to W. I. Carpenter Lumber Co. and furnished a surety bond to secure the faithful performance of the contract on his part. After a breach of the contract by Hugill, the lumber company brought an action to recover its loss

> Ribaldgo Argo Consultores entered into a contract with R. M. Wade & Co. for the purchase of irrigation equipment. Ribaldgo obtained a letter of credit from Banco General, a bank with its principal place of business in Quito, Ecuador. The letter of credit

> UPS Capital Business Credit agreed to loan Ashford International, Inc, an American company based in Atlanta, Georgia, for the sale of computers to the Ministry of Education in Jordan. Ashford was required to obtain a letter of credit from United Californ

> Tri County Truck & Diesel borrowed $165,000 from Security State Bank and pledged its inventory as security for the loan. In addition, Fred and Randelle Burk agreed to act as sureties for the loan. Tri County defaulted on the loan and Security Bank reposs

> Larry G. Snodgrass and Mark Swinnea owned equal interests in two business entities, ERI Consulting Engineers, Inc. (ERI), and Malmeba Company, Ltd., which they operated together for approximately 10 years. ERI manages asbestos abatement projects for cont

> James Fitl purchased a 1952 Mickey Mantle Topps baseball card from baseball card dealer Mark Strek for $17,750 and placed it in a safe deposit box. Two years later, he had the card appraised, and he was told that the card had been refinished and trimmed,

> Crown Corporation has borrowed $16,000,000 from Third Bank. Third Bank required four sureties for the loan. The sureties are as follows: Andover…………$4,000,0000 Busch ……………..$8,000,0000 Chapman…………$2,000,0000 Davidson ………….$2,000,0000 Crown has defaulted

> Fern Schimke ’ s husband, Norbert, was obligated on two promissory notes in favor of Union National Bank. Some time prior to his death, Union National Bank prepared a guaranty contract that was given to Norbert for his wife to sign. She signed the guaran

> Beck was the general manager of Chilkoot Lumber Co. Haines sold fuel to the company. To persuade Haines to sell on credit, Beck signed a paper by which he promised to pay any debt the lumber company owed Haines. He signed this paper with his name followe

> On August 1, 1987, Dori Leeds signed a “ guarantee of credit ” with Sun Control Systems, which guaran- teed “ the prompt payment, when due, of every claim of [Sun Control Systems] against [Dori Leeds dba ‘ Blind Ambitions ’ ]. ” At the time she signed th

> LaBarge Pipe & Steel Company agreed to sell PVF $143,613.40 of 30-inch pipe provided that PVF obtain a letter of credit for $144,000, with the letter of credit entitling LaBarge to payment if PVF did not pay for the pipe within 30 days of invoice. PVF ob

> Abby Novel signed a note with the following on it: “ Glen Gallwitz 1-8-2002 loaned me $5,000 at 6% interest a total of $10,000.00. ” The note did not contain a payment schedule or a time for repayment. Abby used the $10,000 as start-up money for her busi

> First Interstate Bank issued a letter of credit in favor of Comdata Network. Comdata is engaged in money transfer services. It provides money to truckers on the road by way of cash advances through form checks written by truckers. When Comdata enters int

> Industrial Mechanical had a contract with Free Flow Cooling, Ltd., a British company. Free Flow owed Industrial $171,974.44 for work Industrial had per- formed on a construction project in Texas. Free Flow did not pay Industrial, and Industrial filed sui

> First National Bank hired Longdon as a secretary and obtained a surety bond from Belton covering the bank against losses up to $100,000 resulting from Longdon ’ s improper conduct in the performance of his duties. Both Longdon and the bank signed the app

> Paul owed Charles a $1,000 debt due September 1. On August 15, George, for consideration, orally promised Charles to pay the debt if Paul did not. On September 1, Paul did not pay, so Charles demanded $1,000 from George. Is George liable? Why or why not?

> Aldrich and Co. sold goods to Donovan on credit. The amount owed grew steadily, and finally Aldrich refused to sell any more to Donovan unless Donovan signed a promissory note for the amount due. Donovan did not want to but signed the note because he had

> Christy Pontiac, a corporation, was indicted for theft by swindle and forgery involving a GM cash rebate program. Hesli, a middle-management employee of Christy Pontiac, had forged the cash rebate applications for two cars so that the rebate money was pa

> Donaldson sold plumbing supplies. The St. Paul- Mercury Indemnity Co., as surety for him, executed and delivered a bond to the state of California for the payment of all sales taxes. Donaldson failed to pay, and the surety paid the taxes that he owed and